Did you know that there are four different types of testamentary bequests? When you are planning for the future of your estate, it’s important that you know what those bequests are and why you should pick the right one. A probate attorney can help you with these definitions and show you which bequest applies best to your situation. The classification of your bequest is relevant if the estate is too small. You will need to choose your category of bequest based on how you want your estate distributed and the amount of legal fees, estate taxes and creditor’s claims involved in your estate.
The first type of bequest is called a specific bequest. This is one where a testamentary gift or a specific item of property is given to a beneficiary. This asset must be distinguishable from the rest of the estate. For example, you could create a specific bequest for a beach house that you own, or a beautiful grand piano. In most cases, other items cannot be substituted to satisfy a specific bequest. When you are creating one of these bequests, the key is to uphold its name and be specific. If you bequeath a watch, determine which watch it is. If you bequeath a dress, which dress is it? If the item that you bequeathed does not exist at your death, that beneficiary probably will not be able to replace it.
You can also make specific bequests that don’t have an exact value. If you want to grant your son a safe in the attic and all of its contents, then you can place this provision in your specific bequests. You can also bequeath stocks and bonds, but you may want to add some language to these provisions in your will. This is because there are times that a stock or bond will change names as time goes on. If you say that you will give your nephew all your stock in Apple, then if that company changes his name your nephew may be in trouble. Add some provisional language when bequeathing stocks and bonds so that your beneficiaries don’t end up without your gifts.
The second type of bequest is a demonstrative one. These are a gift of a certain amount of property from a specific source or a particular fund. For example, if you gave your granddaughter $15,000 which will come from the sale of your luxury vintage cars, then this would be a demonstrative bequest. You have stated the amount allotted and the source where the money will come from. If your executor is not able to obtain the money that you provided for your granddaughter in your will, then that beneficiary may not receive their provided funds.
Third, there are general bequests. These are payable form your general assets. All you need to write in your will is that you would like to give your son $60,000 of your estate, and this will be a general bequest. As long as the money exists in your estate, your son will obtain it. The last kind of bequest is called a residuary gift. These gifts are the remaining portion of the estate after all other bequests and expenses have been granted. Essentially, it is the “left over” money.
It will be whatever is still unclaimed after estate taxes, administrator’s expenses, legal fees, creditor’s claims, and all bequests are satisfied. Sometimes, a residuary benefactor ends up with a fortune, while other times he or she won’t receive any money at all. By utilizing these four different types of bequests, you will be able to better craft a will that can stand the test of time and help your family in the future. Contact a probate lawyer to get started on your will today.